Globalization: Global Banking & Markets – Essay Sample
Globalization is a process of international integration. It is the interchange of global information, products, ideas and services Globalization has affected every aspect of business. Banking and financial markets are no different from them. Today’s world operates on an international financial platform where money, risk and returns are traded across the borders of the countries.The globalization of financial markets has urged banks to expand their global operations and develop a network of physical branches across the world. This is called Global Banking & Markets.
Global banking & markets have made world a smaller place to trade. Whether it's raising capital in London, buying securities in New York or hedging stocks in Beijing, global banking network has made it all possible. It has helped in overcoming challenges pertaining to international flow of money and has enabled investors to get access to international advisory, capital raising, banking, treasury and other functions of banking and finance.
The global banking and market can be further divided in two wings. These are ‘Research’ and ‘Corporate & Investment Banking’. The research wing informs investors about the performance of international equity, commodities, currencies and economy. The investment & corporate banking is used to carry out transactional functions like mergers and acquisitions, corporate banking etc. This leads to better utilization of money and results in economic growth.
Every benefit comes with a cost. The global banking and market structure has been a key reason behind the global impact of recent US and Sovereign Debt Crisis from 2008-12.
To conclude, it could be said that although globalization of financial markets has improved the global economy, it has also made the world more vulnerable to recessions occurring due to poor performance of an interdependent country.
Published on November 26th, 2014